This week I will be looking to sell off some stocks. But if I do, I’ll likely be taking loses – the Market sucks in August, as trading historians say.
I am looking to sell because I am spread too far out. Too many little baby holdings.
As I write this I am in on over 50 stocks and Uncle Warren says that is too many, so that is too many.
This brings me to the Trader Term Of The Day:
Trimming
Now, there are not a lot of real good definitive definitions of trimming when it comes to stocks, out there. But I know what you’re thinking, it’s kind of obvious:
Trimming your stocks means you’re selling off some of your gains (or losses) so you can get some cash out for something else, or to improve the health of your holding.
I am also using trimming to describe how I am getting the amount of stocks I hold, down to a more manageable level. Trimming stocks is also something I do when I have no money to buy stocks.
It’s so tough though. Every stock, no matter how little it is or how little I have invested, I believe in for one reason or another.
I don’t want to dump any of them. I want to keep them all. But I need to listen to people that know what they’re talking about. Warren Buffett knows what the hell he is talking about.
If he says you should be around 20, you should be around 20.
One of these that I trim, will hit at some point.
Just last week, a company I believed in had a big bump from an earnings report.
I had trimmed this one off many weeks ago so I could get some cash out. Bummer.
It sucks but we gotta treat this like a business, and trimming stocks seems like good business. And Focusing your portfolio seems like it too. Just not as fun, though.
We’ll end with Warren talking about why you shouldn’t be owning a bunch of stocks:
For more Warren wisdom, check out this book about Buffett’s stock market strategy.
Thank you for the read! I’ll talk to you later.
-Mikey
*Remember. This is not investing advise. This is for knowledge and entertainment only. I am a dummy. Do your own research.
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